Intellectual property law: 5 key causes of claims

 

An alert for IP lawyers: This area of law jumps out from the rest of the pack with the highest percentage of reports resulting from simple oversights. In fact, two out of every three reports are the result of a breakdown in the firm’s diary or other systems, a clerical mistake, a failure to properly review a document or just forgetting to take some step that needs to be taken. But these simple oversights are also the easiest to manage. Most can be avoided entirely if firms and lawyers develop, implement and follow systems, and use checklists. These sorts of tools are critical to managing the significant procedural challenges created by IP law’s intricate technical requirements.

Learn more about each cause, including examples from actual claim files, below.

Pie chart: 5 key causes of claims for intellectual property law

Date Range: 2003 - 2017

Find out more about each cause, including stories and videos of examples from our claim files, below.

These failures have nothing to do with your competence as a lawyer, but everything to do with how you manage the process of providing legal services. They break down as follows:

Not managing client expectations (50%)
You fail to appreciate the risk inherent in a client or their expectations of the legal process or how much it’s going to cost (46%) or who is doing what (54%).

Claim file example
Lawyer was retained to file an assignment of a patent. The lawyer made the filing as requested, then closed his file. The client now advises that the patent has become irretrievably abandoned for non-payment of maintenance fees, and may try and blame the lawyer for not alerting him to this risk.

Not managing third party expectations (12%)
You don’t appreciate that someone for whom you are clearly not acting thinks that you are somehow protecting their interests. 

Claim file example
Lawyer acted for an inventor seeking a patent. The inventor brought a group of potential investors to a meeting with the lawyer. The inventor has now advised the investors that he will retain the patent in his name and develop his invention without their participation. The investors respond by saying that the lawyer acted for them all, and that their interests have not been protected.

Not managing the retainer (setting up or concluding) or emerging conflict effectively (38%)
At the start of the retainer, you don't adequately think through how you are going to deliver the legal services or if you are able to represent all parties or, once the legal work is done, you 'move on' without ensuring that the final wrap details are properly attended to, or you fail to manage a conflict that emerges during the retainer.

Claim file example
Firm accepted retainers from two clients with directly competing interests. The problem was identified in a conflict check conducted at the outset, but the lawyer accepting the second retainer did not review the results of the conflict check.

These reports involve failing to sort out the legal issues or strategies required to achieve a client’s goal.  They break down into two categories: 

Ignorance of the law (22%)
You don’t appreciate that you don’t know an area of law as well as you need to in order to provide proper advice.

Claim file example 
In acting for a trade mark applicant, the lawyer failed to file notice that the applicant would not be submitting evidence in support of the application. As a result, the application is deemed to be abandoned.

Not thinking it through (78%)
You know the law, but don’t fully think through all of the legal issues, or what strategies to implement or steps to take to achieve your client’s goal.

Claim file example 
Lawyer is retained to file a divisional US patent application for an invention related to a parent patent application. The parent patent is unexpectedly issued before the divisional application is made, resulting in a loss of the earlier parent application date and the potential of intervening competing applications.

These failures in listening, asking and explaining often involve lawyers making assumptions that later prove wrong.  They break down into two categories:

Communication issues with clients (72%)
You don’t devote enough time or attention to ensure that a client understands you or provides you with the information that you need, or you fail to ask for instructions or consent.

Claim file example
Lawyer acted for an applicant for a trademark. The lawyer received notice that another applicant had priority over the trademark, with a deadline for filing a Statement of Opposition regarding the earlier applicant. The lawyer failed to notify the client in time.

Communication issues with non-clients (28%)
You fail to communicate effectively with either other counsel on a matter or the other people on whom you rely to help you get the job done.

Claim file example
Lawyer was retained to apply to the European Patent Office for patent protection in the UK. An agent misconstrues instructions received from the lawyer’s firm, and fails to pay the annuity fees. The patent lapses.

Simple, inadvertent, oversights break down into 3 categories:

Flawed systems (31%)
These mistakes would have been avoided through an effective, firm wide system.  The majority relate to diary system failures, leading to missed limitations and deadlines.

Claim file example
Lawyer was retained to preserve a client’s rights with respect to a US trade-mark. The registration date renewal was incorrectly entered into the firm’s docketing system, and missed. The registration is irrevocably cancelled.

Sloppy practices or oops's (64%)
These include the unintentional clerical errors that we make when drafting documents (31%), the mistakes that would have been avoided with a careful review of relevant file material (15%) and the mistakes that occur because we just ‘drop the ball’ and forget or overlook some step that needs to be taken (54%). 

Claim file example
Lawyer was retained to file a provisional patent with the US Patent Office. Through inadvertence, the invention drawings required in order to secure a priority filing date are not included with the filing.

Delegation without supervision (5%)
You delegate a task to an assistant or a student who makes a mistake, but only because you failed to provide proper supervision.

Claim file example
A temporary assistant at the lawyer’s office thinks she is properly replying to two separate client emails, but confuses the clients. Confidential information regarding each has now been provided to the other. 

 

This relatively small risk has nothing to do with the quality of legal services you provide. These reports would have been avoided entirely if you simply had the necessary evidence to confirm advice that you gave or instructions that you received.

Claim file example
Lawyer was retained to file for industrial design protection for the claimant’s product in both Canada and Australia. The claimant alleges that the lawyer submitted incorrect drawings, but the lawyer says that she acted on specific instructions from the claimant. The lawyer has no note of those instructions.

Next Steps?

For the articles and publications that will help you avoid claims in your own practice, review:

Limitations and deadlines
Practice management - risks and tips
Areas of law - risks and tips

And remember, effective risk management also requires you to understand what’s covered under the compulsory Policy – and what’s not.  See Cover Pages and My Insurance Policy: Questions and Answers for more information.

 

Last updated: June 2018